India: Ferro Silicon Prices Flat in a Bearish Market

Ferro Silicon producers are met with modest demand as buyers were retreating due to diminishing steel margins.

A bearish sentiment surrounds the ferro alloy market in India as the stainless steel and steel market at large are on a sharp downward trend. Hence, the Ferro Silicon buyers are cautious about making the purchases.

"The market has been highly inactive on the backdrop of a poor steel market in India," said a source referring to one of the reasons for flat demand. He further added that buyers have taken a cautious stance expecting a further fall in prices.

The current price of Ferro Silicon grade 70-75% is down to around INR 86,000/MT (Ex-Bhutan and Ex-Guwahati). However, some deals were heard to have been concluded below the aforementioned levels. Few Ferro Silicon producers were aggressively trying to offload stocks, fearing the price declines could intensify.

Indian and Bhutanese producers are finding it difficult to keep up their prices, as sources agreed that overseas trade has evaporated.

SteelMint learned that Bhutanese producers have decided to cut their offers to entice buying. Export offers are assessed to correct downwards to USD 1,300/MT FOB Kolkata.

Chinese Market:

In a recent development, Ningxia (one of the major Ferro Silicon producing regions in China) issued an announcement to guide major industries to stagger production from December 1, 2018 to March 10, 2019. A few days ago officials inspected the plants in the region and found out that only a few meet the requisite environmental standards. The final outcome is that all those plants that didn't meet the standards have had to reduce production levels, and are subject to Autumn-winter off-peak production from December 1, 2018 to March 10, 2019.

However, despite a cut in production levels from December 1, the price of Ferro Silicon in China has failed to rise as Steel prices in China are weak, hence, Ferro Silicon has also come under pressure. Moreover, as the year-end approaches, some plants are faced with the need for urgent cash, which may lead to further correction in prices.

On the future outlook, market participants expect the Ferro Silicon prices to maintain stability until demand rebounds.